H.B. NO.














relating to the funeral industry.





     SECTION 1.  The legislature finds that, according to a report by AARP, as of 1999, funds in outstanding pre-need funeral contracts exceeded $25,000,000,000.  This number is projected to grow substantially as the population continues to age and to plan for death expenses.

     The purpose of this Act is to strengthen the State's consumer protection laws governing cemetery and funeral trusts by allowing full portability of pre-need funeral plans and one hundred per cent trusting with interest and earnings to be applied at the time the plan is redeemed.  This Act also provides for full disclosure to the consumer of all funds and interest earned through an annual statement.

     SECTION 2.  Section 441-22.8, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

     "(d)  If the contract is canceled or terminated pursuant to subsection (a) or (b) or for any other reason, the purchaser shall be entitled to a refund of the amounts paid by the purchaser[,] plus interest earned, less amounts that may be retained by the cemetery or pre-need funeral authority for its costs pursuant to section 441-38(b).  The cemetery or pre-need funeral authority shall make the refund to the purchaser within thirty days of:

     (1)  Receipt of the purchaser's written notice of cancellation; or

     (2)  Termination of the contract."

     SECTION 3.  Section 441-38, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  [A] One hundred per cent of the funds paid by the purchaser shall be transferred to the trustee to remain in trust where the principal and the interest earned remain the property of the purchaser; provided that a cemetery or pre-need funeral authority may take and receive[, but shall transfer to the trustee as part of or incident to the pre-need trust, all payments received after the recovery of acquisition costs, which shall be the lesser of] amounts necessary to pay for any applicable sales tax, licensing fees owed to the department, trustee fees, trust administration expenses, or cancellation or termination fees permitted by law; provided further that the total amount taken or received shall not exceed thirty per cent of the contract price [or the difference between the contract price and the cost of the pre-need interment or pre-need funeral services contracted to be provided].  The transfer shall be made not later than thirty days after receipt of payment from the purchaser and shall be immediately deposited in the trust.  The trustee shall provide the purchaser with a confirmation notice that the payments have been deposited with the trustee within thirty days of the receipt of payment by the cemetery or pre‑need funeral authority.  The trustee or pre-need funeral authority shall annually provide the purchaser with a written statement containing information on the amount of funds deposited to date, where the funds are deposited, and interest earned."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2013.








Report Title:

Funeral Industry; Pre-Need Funeral Trusts



Requires refunds to include all interest earned when terminating or canceling a pre-need funeral services or pre-need interment services contract.  Requires the deposit into trust of one hundred per cent of all funds paid to purchase a pre-need funeral plan plus all interest earned.  Allows a cemetery or pre-need authority to deduct certain expenses from a trust.  Requires annual statements of the disposition of trust funds.  Effective July 1, 2013.




The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.